To encourage investment in manufacturing sector and train people in latest production technology, the government is planning to establish experience centre for advanced manufacturing in the country. “The industry has to gear up for better quality and adoption of right technology. The government is setting up the experience centre for advanced manufacturing as 4.0 industrial revolutions is already there,” said Girish Shankar, Secretary, Department of Heavy Industry, while addressing an Assocham conference on ‘Construction equipment’ in New Delhi.
The government also plans to come up with a construction equipment manufacturing legislation to address industry’s concerns such as spurious parts (which though cheap, are detrimental to the equipment).
“Industry has conveyed to us the problems in leasing, particularly that of multiple taxation. We assure that our department will take up your case with the Finance Ministry. India has emerged as one of the most attractive destinations for leading global investors with over 7 percent real GDP growth. The government is laying emphasis to achieve double-digit growth, by following proactive, holistic and integrated approach,” commented Shanker.
Construction sector, which has an important place in the Indian economy, is the second largest contributor to economic activity accounting for about 8 percent of GDP. It accounts for the second highest inflow of FDI after the service sector. It generates the highest level of direct and indirect jobs employing about 40 million people and creating 2.7 new jobs indirectly for every Rs 1 lakh invested. The sector has major forward (infrastructure, real estate, manufacturing) and backward (steel, cement etc) linkages, implying a high multiplier effect on economic growth, almost two times.
The demand for construction services is expected to rise manifolds due to several factors like massive expansion of the infrastructure sector, industrialization, urbanization rise in disposable incomes and various government, added Shankar. In the next three years, government plans to invest around $ 1 trillion in infrastructure sector.
“We have plans to build 50 million houses by 2022. In addition, we are developing smart cities and mega industrial corridors. We are also modernizing our railway systems including signals, engines and railway stations. We are planning metro rail in 50 cities and high speed trains in various corridors,” said Shankar.
Similarly, the government is also aiming to construct on an average 15 km of National Highways every day. Besides, it is building new ports and modernizing the old ones through and ambitious plan called Sagarmala. The focus is on upgrading the existing airports and putting up regional airport to enhance connectivity to places of economic and tourist importance.
“My department has also been active in reforming policies leading to creating better eco-system. We have released our first ever National Policy for Capital Goods sector with a clear objective of trebling manufacturing base to Rs 75,000 crores by 2025 and raising direct and indirect employment from the current 8.4 to 30 million,” said Shankar.
The policy also aims to facilitate improvement in technology depth across sub- sectors, increase skill availability, ensure mandatory standards and promote growth and capacity building of MSMEs.
This policy document has tried to identify and address issues relating to all sectors. For construction equipment industry, major bottleneck identified are to expand capacity, need for quality checks requiring regulations to stop usage of spurious spare parts, complex taxation structure, unfriendly tax clearance mechanism and issues with the skill development, said the Secretary .
He added, “We need to continue to focus on the existing strong government and industry partnership which will help to ensure bridging the technological gaps that exist and further create a roadmap for a robust growth of the construction equipment and machinery sector in India.”
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